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Panel warns against high expectations of Brics Summit outcomes

Standard Bank CE Sim Tshabalala discusses topics related to the Brics summit (Video courtesy of Standard Bank)

26th March 2013

By: Shirley le Guern
Creamer Media Correspondent

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Stakeholders, participants and observers at the fifth yearly Brics Summit, currently under way in Durban, need to manage their expectations and guard against placing a disproportionate amount of emphasis on the official outcomes.

This was the consensus during a panel discussion hosted by Standard Bank at its Durban head office on Monday.

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The five panelists – Standard Bank CE Sim Tshabalala, Huawei Enterprises president of the enterprise business group in Eastern and Southern Africa Zhongheng Lui, JSE strategy and public policy director Siobhan Cleary, South African Institute of International Affairs head of economic diplomacy Catherine Grant-Makokera and Financial Times Southern African bureau chief Andrew England – discussed a wide range of topics, all closely aligned with what could be expected from the last in the initial cycle of Brics summits.

Grant-Makokera cautioned that Brics was a young organisation, while Tshabalala stressed that people needed to accept that Brics was “a set institution in a state of becoming” with various stakeholders still working towards fully defining both competition and cooperation among members.

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Grant-Makokera emphasised that the value from summits such as these was not to be found in the official declarations, which were often “cut and paste” affairs but in the intangibles, which included face to face time for politicians to interact, better understand crucial issues and “talk priorities.”

The Durban summit also marks the first time that this yearly conference has moved from a purely political agenda to one that allowed for the active engagement of business and the private sector. The result would be “deep conversations” with potential partners and clients and Tshabalala hinted that Standard Bank could be making some “interesting announcements” during the course of the summit.

The JSE, according to Cleary, would continue to engage with various Brics nation exchanges with a view to helping facilitate trade.

One of the key items on the discussion agenda was the possible launch of the Brics development bank that had been mooted at last year’s summit to address the need for emerging economies to access the capital and resources needed for infrastructure and development projects. 

Grant-Makokera cautioned that the proposed Brics development bank remained “highly speculative” and pointed out that there was no concrete plan of action. She also stressed that, whereas this had been called a Brics development bank a year ago, it had since been adjusted to be seen as a Brics-led initiative, pointing to the fact that there was still a great deal to be discussed and resolved.

She said that although there might well be a paper launch at this week’s summit, it would take a considerable amount of time for this bank to become operational.

Cleary added that one of the most crucial issues that emerged from this was the fact that the Bretton Woods institutions were not meeting the needs of these emerging economies and that there was a lot of dissatisfaction with the World Bank, in particular. The crucial question, however, was whether or not the Brics could do anything about this and address discrepancies within the wider global market.

Another key issue raised during the discussion was what South Africa would bring to the table. England said that trade between Africa and the Brics nations “would have happened anyway” but said that representation from South Africa could better facilitate this and that South Africa had been included in Brics because it was seen as a gateway into Africa rather than because of the size of its economy.

Panelists referred to a recent Standard Bank report that showed that the Brics countries’ trade with Africa has grown faster than its trade with any other region. In 2012, trade between Brazil, Russia, India, China and South Africa amounted to $310-billion, having increased by 11% since 2002. However, despite this rapid growth, intra-Brics trade still accounted for just 10% of total combined trade.

While intra-Brics trade has shown significant growth over the past decade, the Brics trade more with Africa than they do among themselves, the report revealed.

All agreed that the summit needed to tackle critical issues surrounding the difficulties of trading in Africa. Logistical difficulties that included the need for freer movement of goods and the high cost of transporting goods, the lack of financial services and infrastructure, problems with a US dollar-based system and the possibility of a single currency, as well as the possibility of a free trade zone, were raised.

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